By CanopyBoulder
Thanks to the passage of the 2018 Farm Bill more, the hemp and CBD industry is increasingly normalized. You don’t have to look far beyond the shelves of CBD everywhere from gas stations to bookstores to know something big is coming. In fact, the industry is expected to grow to about $1.8 Billion by 2022. With this in mind, the benefits of making the leap into this space seem pretty clear.
But isn’t everyone doing that? In an increasingly competitive space, here are some tips for making your entry into the space successful
It’s not too late to launch your hemp business
Now is the time to make the jump into the space. The winners have not yet been decided and the race has not yet been run. As Jonathan Shultz from Backyard Soda, a natural, CBD-infused soda, puts it: “It’s hard to win a race that hasn’t really started.” However, you should expect anyone and everyone to get in and try to make some money…especially the dietary supplement brands!
Speaking of dietary supplement brands….
Do your homework on how the FDA regulates supplements. The most recent FDA hearing on CBD seemed to only generate more questions but seemed to hint generally that hemp derived CBD products may soon be lumped together and regulated in line with dietary supplements. It may take as much as 18 months before the FDA finalizes regulations for hemp-derived CBD consumer products, so stay ahead of the curve and study up on some relevant case studies. Some great ones to start are Lovaza/fish oil and Lipitor/Red Yeast Rice – either will give you a better idea of how CBD regulations might playout.
Trust but verify everything you hear!
Hemp rules and regulations get spread like the game of telephone. Stay up to date on changes in regulations through reputable news sites, and verify, verify, verify before taking action!
Get great legal counsel from experienced business and hemp lawyers
This may mean you need to engage with more than one law firm. The startup space is a tricky space to navigate in general, let alone adding CBD/hemp into the mix. The space is rapidly changing, seeking legal counsel from lawyers who are experts in their particular field will save you big in the long run.
Do something unique!
Just throwing CBD into a capsule is not going to build value. Think outside the box – what is the gap that you can fill with your unique background and your company’s culture and ideals?
If you are launching a finished consumer product, don’t skimp on brand investment. Your brand can make or break your success. Taking time to thoroughly think through the image you want your company to project to the world will provide you generous return on investment in the long run if done right. This is especially important in this space, as consumer understanding of CBD and hemp and its benefits is still minimal – making it hard to differentiate based on quality. Your brand is the impression people will take away from your company and differentiates you from the competition – take the time to do it right.
Be open and honest with your customers. Most potential consumers are newbies when it comes to CBD/hemp products, which makes the space feel pretty intimidating. Consumers, especially in the health and wellness space, desire vast amounts of education and transparency from the products and brands they purchase. Helena Yardley of 6 Degrees Wellness comments that this is the time to educate consumers on the purpose and the most effective therapeutic dose of CBD, but take care not to make health claims you cannot back up. While we do have some strong anecdotal evidence, without actual science to back it up, we have to be careful not to over promise and risk undercutting the potential of CBD. Without taking the time to educate your consumers and properly labeling your product, Helena adds that the result could be both a waste of your consumers’ time without relief, and a waste of resources on a sub-therapeutic product. Even worse, people may give up trying to use CBD all together because they don’t feel an effect.
CanopyBoulder is a seed-stage business accelerator and venture fund for the legal cannabis industry. Visit www.CanopyBoulder.com.
Photo: Compass Natural
